Left asks withdrawal of fuel hike, says losses by OMCs fictitious

Published: Wednesday, June 11, 2008, 13:38 [IST]

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New Delhi, Jun 9 (UNI) Calling for a withdrawal of the hike in petrol, diesel and LPG prices, a senior Communist Party of India-Marxist MP today challenged the official figures of under-recoveries by oil manufacturing companies, saying it needs to be ''revisited or scrutinised.'' In a letter to Prime Minister Manmohan Singh, Rajya Sabha MP Tapan Sen said Dr Singh had mentioned that the oil companies were facing under-recoveries worth Rs 2,45,305 crore which had led the government to hike petrol prices by Rs five per litre.

Mr Sen also pointed out that a senior official of the petroleum ministry had said the entire under-recoveries could be made up if petrol was priced at Rs 71 per litre at the present crude prices level of 130 dollars a barrel.

''As per lay-man's calculation, Rs 71 per litre is equivalent to 256 dollars per barrel. As you are well aware, the cost of crude comprises 93-94 per cent of the cost of the finished product viz petrol, diesel etc,'' he said in the letter.

The figure of 126 dollars (256 minus 130) per barrel as conversion cost of refining crude to petroleum product appears to be ''fictitious and totally absurd, specially in India which is self-sufficient in respect of refining,'' he said.

Mr Sen said the absurdity and totally speculative nature of such product costing has prompted the Prime Minister to form a committee to find out the real mystery behind the figures.

''In the fitness of things, and for the sake of fair and objective assessment of actual losses of OMCs and the undefined speculative figures of under-recoveries, by the aforesaid Committee, I urge upon you to withdraw the price rise of petrol, diesel and LPG and reassess the situation in the light of duty/tax reductions already made by the Centre and many of the state governments,'' he said.